HDFCBANK equity 1 min read
HDFC Bank Q4 Results: Strong Loan Growth Offsets NIM Pressure
HDFC Bank reports 22% profit growth in Q4 FY26 on the back of healthy loan book expansion, though net interest margins compress slightly.
By Oliver Grant
Quarterly Performance Snapshot
| Metric | Q4 FY26 | Q4 FY25 | YoY Change |
|---|---|---|---|
| Net Profit | ₹17,800 Cr | ₹14,600 Cr | +22% |
| NII | ₹31,500 Cr | ₹28,800 Cr | +9.4% |
| NIM | 3.42% | 3.58% | -16 bps |
| Gross NPA | 1.24% | 1.33% | -9 bps |
| Loan Growth | 18.5% | 16.2% | — |
Key Takeaways
Positives
- Loan book grew 18.5% YoY to ₹26.8 lakh crore, driven by retail and SME segments
- Asset quality improved with gross NPA declining to 1.24%
- Deposit growth accelerated to 16% YoY
- CASA ratio stable at 42%
Concerns
- Net interest margin compressed by 16 bps due to competitive deposit pricing
- Operating expenses grew 15% YoY as branch network expanded
- Credit cost inched up slightly in unsecured retail book
Valuation and Outlook
At current price of ₹1,840, the stock trades at 2.8x FY27E book value and 18x FY27E earnings. We maintain our BUY rating with a target price of ₹2,100 (12-month horizon).
The merger integration is largely complete, and the bank is well-positioned to deliver 15-18% earnings CAGR over FY27-FY29.
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